[Federal Register Volume 66, Number 4 (Friday, January 5, 2001)]
[Notices]
[Pages 1163-1164]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-316]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43777; File No. SR-CHX-00-39]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 by the 
Chicago Stock Exchange, Incorporated Relating to Membership Dues and 
Fees During the E-Session

December 28, 2000.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 18, 2000, the Chicago Stock Exchange, Incorporated (``CHX'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the 
Exchange. On December 19, 2000, the CHX amended the proposal.\3\ The 
Exchange has designated this proposal as one establishing or changing a 
due, fee, or other charge imposed by the CHX under Section 
19(b)(3)(A)(ii) of the Act,\4\ which renders the proposal effective 
upon filing with the Commission. The Commission is publishing this 
notice to solicit comments on the proposed rule change, as amended, 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See December 18, 2000 letter from Ellen J. Neely, Vice 
President and General Counsel, CHX, to Nancy J. Sanow, Assistant 
Director, Division of Market Regulation, SEC (``Amendment No. 1''). 
In Amendment No. 1, the CHX provided a revised Exhibit A to the 
proposed rule change. The CHX inadvertently omitted the text 
relating to the extension of the E-Session credit program in the 
original version of Exhibit A. For purposes of calculating the 60-
day abrogation period, the Commission considers the period to begin 
as of the date the CHX filed Amendment No. 1 (December 19, 2000).
    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes to amend its membership dues and fees 
schedule (the ``Schedule'') to continue, through June 30, 2001, (i) the 
credit program that provides Exchange specialists and floor

[[Page 1164]]

brokers with a credit of $.25 per trade executed during the Exchange's 
E-Session extended hours trading session; and (ii) the waiver of all 
transaction, order processing and floor broker fees for transactions 
that occur during the E-Session. The text of the proposed rule change 
is available upon request from the CHX and the Commission.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The CHX proposes to amend the Schedule to eliminate, through June 
30, 2001, order processing, transaction and floor broker fees for 
transactions that occur during the E-Session.\5\ This proposal is 
designed to allow CHX members to continue to participate in the E-
Session without incurring the fees normally associated with their CHX 
transactions.\6\ According to the Exchange, the vast majority of the 
securities that trade during the E-Session are already subject to order 
processing and transaction fee waivers under the current fee schedule 
because they are either Nasdaq/NMS issues or issues within the S&P 500. 
Waiving fees on the few remaining securities and on floor broker 
transactions in all securities simplifies the Exchanges' fee-related 
communication with its members.
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    \5\ On October 13, 1999, the Commission approved, on a pilot 
basis, the CHX's proposed rule change that allowed the CHX to 
implement an extended hours trading session. See Securities Exchange 
Act Release No. 42004 (October 13, 1999), 64 FR 56548 (October 20, 
1999) (SR-CHX-99-16). The Commission recently approved the CHX's 
proposal to make the E-Session a permanent part of the CHX's 
operations. See Securities Exchange Act Release No. 43304 (September 
19, 2000), 65 FR 57850 (SR-CHX-00-26). The E-Session takes place 
from 3:30 p.m. to 5:30 p.m., Central Time, Monday through Friday.
    \6\ E-Session fees have been waived since the beginning of the 
E-Session. See Securities Exchange Act Release Nos. 42089 (November 
2, 1999), 64 FR 60864 (November 8, 1999) (SR-CHX-99-23) (waiving 
fees from October 13, 1999 through December 31, 1999); 42329 
(January 11, 2000), 65 FR 3000 (January 19, 2000) (SR-CHX-99-29) 
(waiving fees from January 1, 2000 through March 1, 2000); 42486 
(March 2, 2000), 65 FR 12601 (March 9, 2000) (SR-CHX-005) (waiving 
fees from March 2, 2000 through June 30, 2000); and 42929 (June 13, 
2000), 65 FR 38620 (June 21, 2000) (SR-CHX-00-18) (waiving fees from 
July 1, 2000 through October 1, 2000); and 43403 (October 2, 2000), 
65 FR 60234 (October 10, 2000) (SR-CHX-00-30) (waiving transaction, 
order processing and floor broker fees through December 31, 2000). 
This proposal extends the waiver of the same fees through June 30, 
2001.
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    Additionally, this proposal would extend the current E-Session 
credit program through June 30, 2001. Exchange management developed 
this program to encourage members to seek additional order flow during 
the E-Session. Under the program, Exchange specialists and floor 
brokers receive a credit of $.25 per trade executed during the E-
Session. This credit program was approved in May 2000,\7\ and has been 
extended through December 31, 2000.\8\
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    \7\ See Securities Exchange Act Release No. 42784 (May 15, 
2000), 65 FR 33383 (May 23, 2000) (SR-CHX-00-12).
    \8\ See Securities Exchange Act Release No. 43402 (October 2, 
2000), 65 FR 25867 (October 6, 2000) (SR-CHX-00-29).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b)(4) of the Act \9\ in that it provides for the equitable 
allocation of reasonable dues, fees and other charges among its 
members.
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    \9\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any inappropriate burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Act

    The proposed rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \10\ and subparagraph (f) of Rule 19b-4 
thereunder,\11\ because it involves a due, fee, or other charge. At any 
time with 60 days of the filing of the proposed rule change,\12\ the 
Commission may summarily abrogate such rule change if it appears to the 
Commission that such action is necessary or appropriate in the public 
interest, for the protection of investors, or otherwise in furtherance 
of the purposes of the Act.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
    \12\ The Commission considers the proposal to have been filed as 
of December 19, 2000. See footnote 3, supra.
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal is 
consistent with the Act. Persons making written submissions should file 
six copies thereof with the Secretary, Securities and Exchange 
Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of 
the submission, all subsequent amendments, all written statements with 
respect to the proposed rule change that are filed with the Commission, 
and all written communications relating to the proposed rule change 
between the Commission and any person, other than those that may be 
withheld from the public in accordance with the provisions of 5 U.S.C. 
552, will be available for inspection and coping in the Commission's 
Public Reference Room. Copies of such filing will also be available for 
inspection and copying at the principal office of the Exchange. All 
submissions should refer to file number SR-CHX-00-39, and should be 
submitted by January 25, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-316 Filed 1-4-01; 8:45 am]
BILLING CODE 8010-01-M